Magellan Chief Steps Down

Ahoy, investors, (FMAGX)Fidelity Magellan's captain is calling it quits.

The fund announced Monday the retirement of longtime portfolio manager Robert Stansky. According to Fidelity, veteran equity strategist Harry Lange will replace Stansky at the mammoth $52 billion fund.

A Fidelity representative said Stansky stepped down "to begin a new chapter in his life next year." Stansky has been at Fidelity for more than 22 years, including managing Magellan for nearly a decade.

It's been a rough decade for the fund giant under Stansky's watch. According to fund tracker Morningstar, the large-cap blend fund has returned 6.85% annually over the past decade, more than 2.6 percentage points below the S&P 500. Over the past five years, Magellan has lost investors at 2.85% per year, or 1.67 percentage points worse than the index.

Lange has been managing the (FDCAX)Fidelity Capital Appreciation Fund and the (FSCDX)Fidelity Advisor Small Cap Fund. The 10-year annual return for Fidelity Capital Appreciation during Lange's tenure has been 9.81%, just over 30 basis points better than the S&P Index, according to Morningstar.

Morningstar analyst Christine Benz calls the change in leadership "overdue." She says that while Lange is a "terrific manager," his "growth at a reasonable price" style of stock-picking may be a big change from Stansky's pure-growth management.

"I think the big open question is how well his style will translate into a much larger fund," says Benz.

The Magellan Fund -- which is closed to new investors -- began operations in 1963. Edward C. Johnson III, now Fidelity's chairman and CEO, was its first manager; it was managed by famed investor Peter Lynch with great success from 1977 to 1990.